Wednesday, December 12, 2012

Delta announces deal with Virgin

28080_322163534565285_1740587373_nDelta Air Lines and Virgin Atlantic jointly announced a new alliance yesterday. The press release from both companies unveiled Delta’s purchase of a 49 percent stake in the British carrier for $360 million. The airlines will remain separate but will share costs and revenues from joint venture flights. The 49 percent share to be purchased by Delta was previously owned by Singapore Airlines.

There will be 31 peak day round trip joint venture flights between the U.K. and the U.S., Canada and Mexico. There will be nine flights daily between Heathrow and the U.S. Seven flights will go to New York’s John F. Kennedy International Airport and two will fly to Newark, N.J.

Passengers will be able to connect to U.S. destinations through Delta’s hubs and to the U.K. through Virgin’s base in London-Heathrow. U.S. passengers will have access to other European destinations through Delta’s alliances with Air France, KLM, and Alitalia in Paris, Amsterdam and Rome. Members of Delta Skymiles and the Virgin Atlantic Flying Club will earn miles on both airlines. Members of Delta Sky Clubs and Virgin Atlantic Clubhouses will also receive reciprocal access.

The alliance will require approval from the U.S. Department of Transportation, the Department of Justice, and agencies in the European Union. The companies expect approval by the end of 2013.

According to the press release, “The partnership allows both carriers to offer a greatly expanded network at Heathrow and to overcome slot constraints, which have limited the growth and competitive capability of both airlines.”

Sir Richard Branson is the President and principle owner of Virgin Atlantic. Branson is also a minority shareholder in Virgin America, a Virgin brand airline headquartered in Burlingame, Calif. with a hub in San Francisco. Virgin America is a separate company from Virgin Atlantic and is unaffected the new alliance.


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